Foreign Exchange Guide to the Eurozone
In this guide we review :
- euro info - general info about the euro
- euro in the markets - recent EUR moves and predictions from the FX markets
- Travelling in the Eurozone - currency & money saving tips
- Buying euro cash online - travel money for the Eurozone
- Sending money to the Eurozone - save on euro bank transfers to the Eurozone
- euro exchange rates - latest info & charts.
euro (EUR) general currency information
The three letter currency code for the euro is EUR and the symbol is €. It is the domestic currency in Eurozone, Aaland Islands, Andorra, Austria, Belgium, Cyprus, Estonia, Finland, France, French Guinea, French Southern Territories, Germany, Greece, Guadeloupe, Vatican City, Ireland, Italy, Luxembourg, Malta, Martinique, Mayotte, Monaco, Montenegro, Netherlands, Portugal, Reunion, Saint Barthélemy, Saint Martin, Saint Pierre And Miquelon, San Marino, Slovakia, Slovenia and Spain.
The euro (ISO: EUR) is involved in slightly more than 30% of all foreign exchange deals, and as such, is the world’s second most traded currency, behind the US dollar.
The euro is the currency of the eurozone (officially called the ‘euro area’), which consists of 19 of the 28 member states of the European Union, and is used by almost 350 million Europeans. It was introduced in January 1999.
Of all the thousands of exchange rates that exist in the world, the euro-to-US dollar exchange rate is the most actively traded, or most ‘liquid’.
Since its introduction, the euro’s lowest value against the dollar came in October 2000 when EUR/USD hit lows of 0.8231. The currency was strongest in July 2008, shortly before the worst stage of the 2007-2009 financial crisis, when EUR/USD reached 1.6038.
There are currently more than twenty nations and territories which peg their currencies to the euro, the largest of which is Denmark.
euro (EUR) in the markets
In mid-October, the euro was floating around 1.18 against the dollar, having pulled back from September’s long-term highs close to 1.21.
Against the British pound, the euro stood at 0.897. It had been as high as 0.9306 in August – a level that hadn’t been achieved since 2009.
Speculation surrounding the end of the ECB’s quantitative easing program has driven euro appreciation this year. For the first time since its introduction, the central bank will discuss tapering QE at its meeting on October 26th.
In September, Dutch bank ABN Amro predicted EUR/USD would rise to 1.3 by the end of 2018. As reasons for the pair’s climb, ABN cited “strong conviction” on future US dollar weakness and less stimulative ECB policy.
In September, HSBC cancelled its forecast for the euro to rise to parity with the pound. HSBC’s revised year-end forecast now places EUR/GBP at 0.893.
A divergence in the paths of monetary policy between the ECB and the Swiss National Bank will lead to EUR/CHF climbing to 1.18 in the medium term, from October's rate of 1.154, according to a prediction by Credit Agricole.
Bank of America Merrill Lynch go one further on EUR/CHF. The bank has a “minimum target” of 1.20 by the end of 2018. BAML says that EUR/CHF “looks cheap relative to its longer-term moving averages.”
Eurozone currency and money saving tips
When arriving at any new destination for first time visitors it cant hurt to stop by the Tourist Point to get any free maps, discounts, and cost free events. Most decent hotels have free WiFi so try using this to avoid any suprise Roaming fees on your phone when you get back home. ATM and credit card use varies greatly between countries so purchasing a Pre-paid Travel Card before leaving for your travels can save time and hassle.
If you would like to travel by train and can book a fair way in advance you can save money by getting a pass for Europes extensive train system that goes pretty much everywhere. You can check prices at sites like RailEurope. To safe a lot of travel time and money you can book a sleeper cabin on an overnight train. While travelling across Europe by bus used to be uncomfortable there are now low cost luxury buses available. And now to save even more time at your locations instead of travelling to them, costs for flights have greatly reduced in recent years making it a very affordable and very fast way to get around. Depends on your preference.
For more travel tips and ideas on ways to save money when traveling in the Eurozone read our EU Travel guide
Eurozone Trip Checklist
Travel money for the Eurozone
Save money and time by Ordering your euro online from Travelex, you get better rates and can pick up the EUR cash locally or even on travel day at the airport.
Another popular option is to use a Pre-paid Travel Card. Your Debit/Credit Card provider will charge you 2% from market mid-rate, but your bank may also charge an extra 3% as an “Overseas Transaction Charge” plus “Overseas ATM” fees for withdrawing cash.
For card purchases if offered a choice of currencies always select to Pay in euro otherwise you may get much worst exchange rates.
Sending money to the Eurozone
When sending money to the Eurozone it’s important to compare your bank’s rates & fees with those we have negotiated with our partner money transfer providers. To get a better deal you should follow these 3 simple steps :
- Open an account with a BER reviewed FX provider (id docs may be required)
- You specify the local or euro amount you want to transfer
- Make a local currency domestic transfer for the requested amount to the provider's bank account in your country
- Once your funds are received by the provider the converted EUR amount will be transfered to the recipient account you specify in the Eurozone.
By comparing the rates of FX specialist providers rates versus your bank's standard rates you can hopefully save around 5% and maybe more - end result is more euro deposited into the recipient bank account in the Eurozone and less margins and fees kept by the banks!